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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 18 December 12
NEWCASTLE PORT IN AUSTRALIA SHIPPED 20.19 PERCENT MORE COAL W/E 17 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 3,269,640 MT of thermal and coking coal for week ended 0700 hours 17 December 2012, Newc ...
Monday, 17 December 12
SHIP PRICES TO BOTTOM OUT IN 2013 SAYS GEORGE D. GOURDOMICHALIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship values especially in older tonnage, or even modern vessels with poor quality are expected to fall further during 2013, with the market as a who ...
Monday, 17 December 12
SYNERGISING WITH PIONEERS TO DEVELOP TOMORROW'S LATIN AMERICAN RAILWAYS
Press Release: Brazil being one of the largest country in South America has one of the most dynamic rail markets in the world. Rail transport in Bra ...
Sunday, 16 December 12
FREIGHT TREND SOFTENED THIS WEEK - VISTAAR
COALspot.com - The freight market further softened this week and closed at 784 points (down by 18.84 pct). The cape index had the biggest fall ...
Friday, 14 December 12
GMR GROUP OF INDIA TO IMPORT 100K MT OF 4800 GAR COAL
COALspot.com: GMR Group of India to invite bids for 100,000 Metric Tons of imported non coking coal to be delivered during January and February 2013 ...
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- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- GMR Energy Limited - India
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Agrawal Coal Company - India
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Australian Coal Association
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- The University of Queensland
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
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